City Government

New Yorkâ€™s Broadband Gaps

In seven neighborhoods in New York City, businesses
still can’t get high-speed Internet access (known as
broadband) at prices they can afford according to a
new reportby the Center for an Urban Future. These
neighborhoods include Long Island City, Williamsburg,
Hunts Point, Red Hook, Sunset Park, DUMBO, the
Brooklyn Navy Yard and several other commercial areas.

“It is unacceptable that in huge areas of the city, in
some of the fastest growing business sectors, small
businesses have to choose between dial-up access and
broadband that costs $1000 a month or more,” said City Councilmember Gale Brewer, the head of the Technology in Government Committee,
who is leading the council’s investigation of
this issue. “There has been a market failure in
providing affordable broadband access â€“ a failure that
is hobbling the economic growth of businesses outside
of Manhattan.”

The “broadband gap” is a problem because the
high-speed, “always-on” Internet is critical for New
York’s economic competitiveness since the
neighborhoods affected are the areas with the greatest
potential for growth in industries such as health
services, the arts, film and music production, air
transportation and food production, which typically
locate their offices outside of Manhattan’s central
business districts.

Broadband refers to the high-speed Internet delivered in a variety of ways --
over copper wires by the telecommunications company
(called a “digital subscriber line” or DSL), cables by
the TV company, a T-1 line, fiber optics or wireless.
The benefits of broadband include the ability to use
much cheaper (sometimes even free) telecommunications
services provided by companies such as Vonage, Lingo
and Skype, which only work with a high-speed Internet
connection. These companies allow you to make phone
calls over your Internet connection for a fraction of
the cost charged by Verizon. Tech-savvy businesses
and non-profit organizations have already started
using these alternative services for all of their
telecommunications needs in order to save money.

There are several reasons for the broadband gap, says
Phaedra Thomas of the Southwest Brooklyn Industrial
Development Corporation, an organization which
provides business services to 2,400 businesses that
represent over 40,000 jobs in two of these districts.

First, in terms of DSL service, the copper wire
infrastructure is too old, which makes for slow transmission
speeds and frequent service
interruptions. Second, these neighborhoods are too
far from the main telecommunications office to get
service.
Third, cable modem service is not available since
these businesses are primarily commercial areas
without demand for cable TV. Finally, at around $600
a month, higher-quality solutions (such as T-1 lines)
are not affordable for these businesses.

Other obstacles to broadband access in these areas
include the lack of competition between multiple
providers, the low demand for broadband, the
difficulty of accessing and installing wires in some
buildings, and the lack of knowledge about broadband
options expressed by small businesses.

Currently, the city is considering playing a more
active role in closing the broadband gap by conducting
more research about broadband connectivity, educating
businesses about broadband, promoting sharing of a
broadband connection by businesses and founding a
citywide broadband commission.

Another policy being considered is to start a
municipal wireless broadband initiative. "Wireless
may be the only solution going forward," said Agostino
Cangemi of the city's Information Technology and
Telecommunications Department.

Philadelphia has already received widespread attention
for its wireless initiative, which does not use public
or school technology funds and instead relies on a
public-private partnership. Philadelphia plans to create
the infrastructure for high-speed affordable Internet
access by summer 2006 for an initial investment of
$10.5 million to construct and $1.5 million annually to
support. However, Verizon has already successfully
lobbied at the state level to make such municipal
telecom projects illegal in many states. The
Philadelphia project was granted an exception since it
will be nearly complete before the law goes into
effect.

Broadband for Affordable Housing

While solving the broadband gap for New York
businesses is critical to the city’s economic future,
there is another obvious gap in high-speed Internet
access that might be just as important to the city’s
future: affordable housing. Currently, there is a
pressing need for more affordable housing units and
plans are going forward to build them. It is
imperative that these new units are pre-wired for
broadband because it can be done for only a few
hundred dollars per unit or .1 percent of the unit’s
cost. However, it is much more expensive to install
broadband after the building has been constructed.

Low-income people need access to the Internet in their
homes because sometimes that is the only place where
they may have the time or the privacy necessary to
conduct research on personal health and financial
issues, apply for a job online or take a
distance-learning course.

Despite this, there are arguments that, even at one-tenth of one
percent of the cost, funds should be used to build
more affordable housing instead. In addition,
installing broadband alone will not improve the
opportunities of low-income residents. There is also
a need for cheap Internet access, computer equipment
and training. In a new City Council resolution, city
officials recommend that affordable housing residents
earning less than 80 percent of the median area income
should get Internet access for free or for less than
$10 per month.

“The benefits of this technology are so compelling
that no less than 20 states and the District of
Columbia, ranging from California to Kentucky, have
amended their housing finance policies to encourage
all new development of affordable housing to include
high-speed Internet access,” said Mark Levine of One
Economy, a national
non-profit.

There is wide-spread support for the City
Council resolution; included among the supporters are the New York City
Department of Housing Preservation and Development and
the New York City Housing Authority. But without
legislation at the state level mandating the
pre-wiring of affordable housing units for broadband,
it is unlikely that builders will choose to implement
this on a wide scale.

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